STB pushes arbitration with new rule

Tuesday, May 14, 2013

The U.S. Surface Transportation Board has adopted a new arbitration program for disputes between shippers and railroads with clear liability limits.
Effective June 12, the rule change establishes when the parties would be ordered to participate in mediation.
Initially, Class I and II railroads were to be automatically enrolled in the arbitration program unless they specifically opted out of the program by application to the board. Class III railroads and shippers were to opt in on a case-by-case basis. Before the final rule change, however, the agency decided to make the program have an opt-in requirement for all parties, instead of making railroads opt out once they were already enrolled.
Under the rules, arbitration awards can’t exceed $200,000 unless a new amount has been agreed upon by both parties.
Calling the new procedure less time-consuming and expensive, officials said the program will ultimately be more useful to shippers and railroads. The new rules outline arbitration eligibility and establish limits on monetary awards. For instance, arbitration can’t be used in labor-protection disputes or in licensing applications and petitions for regulatory exemptions.
“Changes to the arbitration rules are intended to consolidate and simplify formerly separate arbitration procedures and to encourage greater use of arbitration,” according to a STB press release.
In August 2010, the board started looking into increasing mediation and arbitration in its cases and asked for public comment. The board tried moving these processes away from formal agency proceedings whenever possible.
A notice of proposed rulemaking was published in March 2012 and testimony about the rule change was held in August. The final rule can be viewed here. - Jon Ross